recommend stocks. it is going to send sprint further down. jim, are you abandoning sprint? because t mobil is not going to buy them. i'm jcram jim kramer and i will you tomorrow. larry, what are you looking at tonight? >> mitt romney floats and idea to cap keyductions across the board. we set up our own debate. those are the topics we are going to tackle. and this evening. listen to vice president joe biden on the trail. it is the gift that keeps on

giving. >> how they can justify. raising taxes in the middle class. it has been buried in the last four years. how in the lord's name. >> that is nodt a froidian slip. plus three stories that happen to break before the election. a leftist new york attorneyy general looking to bash banks and that is as phony as a $3 bill. also a judge strikes down pennsylvania's voter id law and the obama administration is telling companies it is okay to disregard the law when it comes to handing out pink slips in advance to big budget cuts. all three happening before the election. mitt romney has finally put meat

on the bones of his tax reform idea. he floated the idea of a $17,000 cap on tax reform reduction. >> you could say everyone is going to get up to a $17,000 deduction. you can fill that bucket if you will and higher income people might have a lower number. >> this is brand new stuff. we have howard dean former vermont governor and candidate. and let's look at this for a second. what do you think? a $17,000 cap on tax deductions for everybody as a way of being fair because the upper end would pay more. what do you think? >> i don't have a problem with

the eidea of deductions. here you are. you guys are talking about the private sector all the time. so, i've been convinced because of the high rate of canadian home ownership, i'm not convinced of doing away with charitable deductions. $17,000 ceiling for all tax deductions across the board. sure, steve. the upper end people would have a problem across the board. >> i like this idea a lot. i just heard about it an hour ago. but i have always believed as a supply sider that tax deductions and credits are termites in the tax code. if you can cap them, it is a

sane thing to do and something that howard dean should like because it is progressive. >> steve, what i want to know, if you are in favor of limiting these kinds of deductions, then how about getting ready of the oil depletion allowance for oil companies? >> i think that is something that every manufacturer gets. that is anexpense. when you are talking about writing off a 2 million home i'm not in favor of that. >> do you realize this is the first time that we have ever agreed on anything? >> you know what, this is the right approach to go, larry. i think that mitt romney has opened up an avenue to pick up in the polls here. this plan is evolving into a

flat tax. this one piece has legs to it. it has been out an hour. we can't really say. but what about the enormous cu s s in tax rates. that is kind of tough. when you cut tax rates to 22% and you pay for it by raising taxes by $2 million then we have a problem. that is a fair point. but let's look at somebody you who makes an income of $80,000. that perp gperson gets a big deduction off of his income. solar so, larry, it is something to fix this tax system. >> can i weigh in on this? >> here is the problem i have. i think this is going to get down to $140,000, $120,000 that

was the number that paul ryan floated today. things that trouble me. i don't want middle class taxes to go up at all. so i'm worried about not just the mortgage deduction, the kiddy credit, health care deductions and earned income tax credits and i'm a little concerned, i would have to see the details, i want it to red line all middle class deductions and soak the upper end whose rate comes down to 28. >> the chances are of somebody making $80,000 or less, you are probably not going to hit them on the earned income tax credits, probably pretty unlikely. but you are right. it could be a problem with the middle class. you have to see the fine print.

did romney release the fine print? >> interview from the fox affiliate in denver. can i ask you? >> let me say this, this is the first time in a long time that i disagree wednesday yo disagreeed with you. if you can trade in people in the middle class to increase their investment i'm all for it even if it means a small investment in the amount that they pay. >> why not get rid of that in terms of the corporate tax rate. >> i'll take it. >> sorry howard? >> i'll take it. they make more out of the oil allowance than they pay in the corporate tax. >> answer me this question, governor. why is it that you keep going after the oil and gas industry

when it has created the most jobs in america in the last four years? >> i'm glad that under president obama that we have fewer oil imports but we want everyone to pay their fair share. >> gentlemen thank you very much. we appreciate it. coming up. we hear can't wait for tomorrow night's debate. so we are going to talk about growth and prosperity, tax poli policy, out-of-control spending and debt. team obama kcoerces companies ad not warn companies of impending budget cuts. the president is trying to hide a flood of job losses before the election. the kudlow caucus is going to debate that proposition.

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welcome back. barack obama and mitt romney are ready for their first presidential debate. that will be tomorrow night, 7:00 to 8:00 p.m. polls show a close race. the nation ago average has obama leading romney 49-46. the economy is issue number one and whose plans are better for the middle class. to answer that we are holding our own debate right here on the kudlow report. we are joined by new jersey democratic congressman and jim

gillmore to make the case for governor romney. there will be time to talk among your selves at my disgression. the first question is going to congressman big paskrel. 1.3% gdp 25 million people out of the workforce. mr. president, what is your solution to the prosperity and the recovery that continues to elude us? >> over the past 30 months we have had an increase in private sector jobs. but that is the direction we are going in. if you remember what happened before that, when the president raised his hand in january of 2009, we were losing 700 no,000

jobs a month. but the fact of the matter is we are going in the right direction now and we should keep doing that. the president supports the position on the creation of jobs and the government can't do everything but it has a responsibility. we have lost public sector jobs and we have laid off a lot of cops, firefighters and teachers. that is not the way to get the economy humming again. >> governor gilmorgilmore. aka governor romney, what is your solution? >> the economy is another serious problem. that is another way of talking about the plight of real people out there. after four years of stewardship, i can say that we are not moving in the right direction. we are picking up 100,000 jobs a

month. you have to have 180,000 just to keep pace. we are not in a recovery. growth is under 2% while it has been 2.2. that is why we are sitting around after all these years. we have a specific plan. that plan are tax incentives in order to build up this economy and great growth. you can't do anything in this country until you get growth going again. until there are plans in place. talking about a tax reduction so that they can spend more money. so that they are xare competiti with over seas people. >> you heard governor gilmore and in your opening, you basically said okay the economy is not as bad as you think. what i want to hear is what you

and president obama would do in a second term. what positives would you put into place? >> we do need a jobs bill. someone said that the recovery bill that passed in 2009 did not go far enough and help the states help pay their bills. >> that is why we had a downward draft. look, when the governor was the governor of virginia, he was smart enough to know that you may have cuts in budgets and certain areas but he in vesseven education and technology and in many of his initiatives many of them wanted him to cut more. he knew what to invest in for the future of kids so i commend the governor what he did.

>> what president obama, sir, with all due respect, what about private sector incentives, it is private businesses which people do create on their own. you are right. >> and the president has proposed -- >> give me one idea that would help boost the private sector. >> it is interesting today, larry, the biggest front-runner, in terms of creating jobs is manufacturing. we know looking back it is easy to say that we lost 300 to 500,000 jobs every year. the fact of the matter is that is what we should be investing in. i commend the president for trying to get corporations. >> governor gilmore, we are onto

the tax subject now. we merged it with the prosperity subject. corporate tax reforms should pt affect the tax right? by the way, why haven't you talked more in your campaign about the 20% tax cut and the corporate tax cut from 35 to 25%. supply sides have been critical of you and your running mate because you seemed to have back add way from the tax issue which even president obama believes would have stimulate the economy. >> i'm sitting here debating an able congressman. but the fact is, that president ro romney's plan is out there for everyone to see. they are on the record and he will implement for the purpose of creating boe ining growth. it is because you are running to

help everybody. everybody that needs to get a job and people are suffering out there. >> what besides taxes. >> what besides taxes? >> give me something else? >> the most important thing is to get the private sector something else. people are on the sls out there. you know what, people have an uncertainty and i don't think we can afford another four years of interrupted jobs. >> president, i'm going to give you the last word. just before the show tasta stard w we had breaking news. mr. romney how says in addition to his 20% across the board tax cuts he would help pay for that

by capping tax deductions at $17,000 across the board. i want to give you a shot to comment. >> i find it strange larry, that in this moment before the debate that we are getting a revisited mathematics. it was obvious that it didn't just add up. so what they are going to do is eat into the mortgage deduction for middle class people. you know what that does for the citizens in the districts? >> nothing. >> you would rather let them keep their deductions? >> that is not one of them. the mortgage deduction is critical to the lifeline in the state of new jersey >> last one, what would you cap? can you give me one. >> in terms of second homes, property which is tremendous

value i think these are things that we can look at. >> languahang on. next up our candidates are going to tackle the movement vexing issues of the election. you are not going to want to miss what they had to say. [ horn honks ] hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today.

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welcome back to the kudlow report. making the case for the president is new jersey cagman and gentleman let's talk about overspending. that is a historic high. debt is 100% of gdp. governor gilmore aka governor romney. what would you do to stop this borrowing binge. deficit larry mean that is you are spending more than you are taking in. there are two things that you can do. you have to look at the spending to determine what you have to hold on. you have to set a priority to control spending. in the second thing you must have a program to increase growth in this country and new

revenue. that makes a lot of the decisions about spending easier. you get more money coming in. >> president, you have been accused by your critics of failing to deal with entitlement spending reform and basically trying to raise taxes as the only means of deficit spending. are those charges fair? >> absolutely not. we had a deal going. myself and mr. baynor until mr. can toter stepped in. what i could support is that we would have tax cuts and we would have cuts in the budget and in areas certain revenues and increased ed in taxes. it seems fair $1 of tax

increases and $3 to $4 of cuts in the budget. >> 3, to $4 to $1. could you guy into that? do you think your fellow republicans could buy into that? >> the more taxes you raise, the less growth you get. that is a economic proven point. you are going to end up with less growth. the absolute key is more revenue through more growth. the president does not want to do that.

>> that is absolutely false because what we do know is that any tax on the middle class is too much for democrats right now. we have made it clear. we recommended the legislation but before the house, before we left for vacation, we should have legislation and middle class tax cuts. >> they wouldn't do it unless they were included. >> thank you. and former governor jim gilmore, gentlemen stay where you are. there is more coming here. we have more work to do with you. up next the government is on a witch hunt. it is charging jp morgan with fraud. they bought bear stearns at the

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welcome whaback to the kudl report. in this half hour. a ploy by the obama before the election. companies are being told they can disregard the pink slip law before mass layoffs because obama doesn't want to take the wrap for a deal he didn't negotiate. welcome fraud and come on voter fraud. the law may live to see another day. we'll discuss that in a minute. new york attorney general is suing jp morgan. he is alleging that the business that he took over in 2008 defrauded mortgage bond investors. he is in favor of the government b

buying it in the first place. it is in sane. campaign politics by the obama administration. here now is mike osanian and our bud l kudlow caucus is still with us. and we welcome steve malanga. senior fellow at the manhattan institute. the whole fellow government wanted jp morgan to buy bear stearns as part of the federal government to avoid a melt down and now they are coming back and suing jp morgan. is this a crude ploy or a popular thing? >> this committee that he sent up to fine banks to cause the melt down, is the first part if you will.

their evidence came out and they testified in 2010. they had this information for years. he has been able to use the last two years of the stuff. >> the martin act which hardly ever works. >> eliot spitzer lost every single thing. there is nothing worse than eliot spitzer. where does he come off? >> here is jp morgan stepping up to the plate and they buy bear sterns and the whole mortgage portfolio that they had. where do they come off suing jp morgan? >> if you want to go after the dumb trades go after the individuals in bear sterns? why sue the whole individuals of bear morgan?

>> it is going to go well beyond what is happening right now. obama doesn't care. i think he is coming out looking very bad, larry. >> i want to get a quick take before we bring the members in here. to me, this guy is a cheap shot artist. he may be representing obama you wants a cheap shot to go after the banks and where are the kudos for jp morgan that did this and put this together at a time when everything was unravel elling. >> the federal government was under pressure for the euro europeons. andrew cuomo preceded snyder man and declined to use the act. this is the same evidence that

he looked over and said i'm not going ahead with this and there are cases and -- let me get this straight. he decided the evidence wasn't there. snyder man looked at it and he is playing cheap politics. >> that is your opinion. >> he has become a good governor of new york and said no go. and this guy says no go and we are on the eve of an election and jp morgan did the lord's work. somebody had to stock the hemorrhaging. >> there is fraud here. no question about it. who is responsible? i don't know. >> why sue them? >> that is where the money is f this is like that movie network. where petier finch says we are

not going to take it anymore. you don't get it. you want us to go back to a period of time where there was slack oversight and the guy on main street gets the shaft near the end. >> why is he pulling it out now and -- judask the justice department and i support what the task force did. you know it is a value thing. what the value is of the mortgages that are being sold. >> they pushed it. that was under the former administration. >> it was under obama too. >> he was there when bush was the president. >> look, tim geithnquit geithnee new york fed. he was the guy responsible. >> don't blame it on the

president. >> i think there are politics here. but i could be wrong. it smells awfully smelly to me. >> if you want to go after individuals that packaged mortgages badly and screwed their clients. some bad things happened in 2000. i get that. but why go after an in indust institution like jp morgan. to me larry, the sin here is the timing of this. i was working in the investment community when this was going on. they get the bad. but none the less, the fact is that they don't need to be doing it here before the election and trying to make a political point. that is what i think is improper here. while we are at it. why are we taking the taxpayor's

money here? >> they agreed with it. >> look, i was against it. i'm with you. >> that is a different subject. but i want to say, tim geithner, head of the new york fed. treasury secretary under obama, there is a link in that story. i admire him and i interviewed him. but he was the link between the two and i love to see him come out and say this action between jp morgan is dumber than dirt. >> larry, you agree that we are selling these mortgages. at a price that was shafting the consumers. >> million mistakes made. >> i don't want to go there. >> i'm just debating the wisdom of going after jp morgan.

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you are required to show a valid photoid just about every place except when you are casting you're vote. >> when the legislature passed this new law. most voters needed a state-issued id card. votered needed to have a birth scertificate or other id to get one.

today the judge said that the gap between the photo id issued so far and the need of those that have them won't be closed in time. he said the state appears to have a good system in place but every reason to think that the process will go through bumps in the road. so he blocked the law from going into effect in pennsylvania. poll workers can ask for a photo eye d but those without one can still cast a ballot. >> i was going to ask you, a, no permanent in junction. >> i guess it probably will. >> and he did not say that it was unconsti tungsal under the law? >> if they have a better process

and feel more comfortable we could see this in the next elick electi election. >> my guess is that it would be ruled unconstitution al. >> thank you very much. >> jim, where do you come out on the voter id? >> that we ought to have integ are the i think that when the democrats come out and they say that this is some kind of effort to prevent people from voteing that is adefamation on our system. that means you should prove that if you show up to vote that you are the guy that is registered

to vote. >> i carry this for a reason because there are many times in this constitution where we did away with poll taxes. we did away with gender discrimination and with racial discrimination and we did away with age discrimination. my point is this. what the identification part of a voteing repertoire is dependat upon the state. let's take the pennsylvania case because you put it on the table. when the secretary of state says to the people of pennsylvania that we are not going to allow the democrats to vote who they want.

what is the evidence of fraud in the state of pennsylvania? >> show me the evidence. where is the evidence of fraud? why change the law then? >> hang on a second. steve, where do you come out in this? he said what congressman said that the evidence of fraud is very, very small. yet, almost everything else we do in society today requires an id. one of the things i don't understand, you find accusation of voter fraud in democratic primaries in newark, new jersey corey booker's people accused frazier's people of fraud. >> did anyone go to court on

th this. >> i know we are talking about new jersey, but please. >> the entire political machine in essex county supported james. who was re-elected in. >> i admire bill, but there is nothing in the constitution that says we have a right to have illegal elections. >> i'm not advocating in any way someone who has the right to vote voting one, two, three times. >> in mississippi, come on it is wrong. >> and this is the effort that. >> if you had a voter id

requirement it would be hard to keep voting the dead multiple times. >> come on larry, nobody is advocating that. >> i think the elect tore is hop e honest. i went through a situation where my writing votes were challenged. the judge said this is nuts. people should be encouraged to vote and i'm thinking of that 90-year-old woman in philadelphia or pittsburgh that doesn't have a driver's license and i think that is unfair. >> even in new jersey seniors are allowed to have id. >> you have to go pay for it.

>> we are not done yet. >> time to move on with another topic. imperial president. team obama coerces companies to ignore the law and not hand out pink slip warnings. it is part of the law. what about the law? the kudlow caucus debate is up next. why the pink slips haven't gone out because of the defense cuts.

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our kudlow caucus is still with us. i don't think i said that before. i apologize as always. let me begin with you on this point. the defense contract. i go to you because you are from virginia. they are going to get killed by the budget cut. the law says that the contractors have to send out pink slips and the obama administration says don't. what is up with that? >> it is politics. they don't want to go to

virginian as and say we are going to layoff tens of thousands of people. if a company is going to be on the safe side, that is the purpose of the law. >> that is the thing, the real purpose of this law was to give a break to the employees to let them know that in the next couple of months, the probability of them losing their job was high. it seems to me he is being self issue. that to me is he self issue because this thing to me was designed to help the world? >> in a magazine this month, it

was said that in activity, if we lesterly, we would have a lot of big problems. you said it yourself. we want to prevent that period of time when there would be across the board cuts that would pu hurt our meilitary budget. i'm a veteran. i trust panetta on these issues. >> i have had republicans and democrats on the show and it says they should not have taken a break. it appears to me that the president is playing politics and we heard about this. it came out on a friday night.

notify the workforce that the cuts are coming. >> first of all, i think one of the reasons that congress should be back is about the fiscal clip. what we are facing here, the combination of automatic defense cuts and domestic cuts and the fiscal cliff happening out m automatically is stag terring. >> you brought congress up. i think it is valid. >> that administration was supposed to put out a report specifying which budget programs would be cut and they never about it. that is terrible. >> come on, they jumped in and screwed that whole thing up. don't blame what is going to happen on the president. >> the law said.

i'm a former omb guy under reagan. the law said the administration must put out a report and that is where this notification comes from. they didn't do that. >> proper law, is going to cushion all of this, but instead what we have awrong timing here. it looks dishonest and it is not proper and by the way, bill, let's remember this president doesn't want the bush tax cuts to be extended and that is going to hurt the economy. >> we had legislation to go to ensure the middle class tax cuts and the republicans refused to bring it up on the floor. they didn't look at it. why didn't they vote on it?

>> thank you kudlow. caucus. spectacular. you did a heck of a job. and steve played himself. coverage starts here tomorrow night. that is it for tonight's show. tomorrow is going to be something else.

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